JustSecurity reporter Adam Klasfeld reported Monday that four potential brokers said they couldn't find anyone to take Donald Trump up on a bid to offer his real estate empire as collateral for a nearly $500 million bond, citing a deposition from the former president's lawyer Alan Garten.
There were also about 30-plus "surety companies he says Trump Org. unsuccessfully approached," Klasfeld added on social media.
According to Trump's former lawyer, Michael Cohen, the reason is that the deal is terrible for anyone who makes it.
"He's in the real estate industry. Much of his assets are leveraged," said Cohen.
"Let's not forget, if he sells the asset there's also a tax consequence that would be due. He has long-term capital gains. Because it's New York, you also have city and state tax, so you're looking at effectively a 40 percent taxable rate.
"He also has on top of that mortgages attached. So state taxes, federal taxes come first, then followed by the mortgage, then whatever is left over would ultimately go to pay off the judgment or to repay the bond."
That, he explained, is why no one is taking such a deal.
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"It's effectively impossible. What does that tell you?" Cohen asked. "It tells you that he's not nearly as rich as he sold himself to the American people, that he — even at the trial he told the judge he had at least $400 million in cash. If that's true, post it, and if it's not true, it could be a perjury charge."
It prompted questions from Trump foes, such as Itai Leshem, asking, "What kind of billionaire can't pay half a billion?"
"Within the past week, negotiations collapsed with Chubb, the insurance giant which provided the bond on the E. Jean Carroll judgment," Klasfeld also said.
The international insurer, the Chubb company, offered a $91.6 bond Trump needed to pay in the Carroll case before he could appeal.
See the full interview in the video below or at the link here.
Michael Cohen explains why Trump's offer of property is such a crap deal for any company youtu.be
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